Goldman Sachs has elevated Suzano (SUZ, Financial) from a Neutral rating to a Buy, adjusting its price target to R$65 from R$63. The analysts cite several favorable conditions, including pulp prices nearing marginal cost and a notable 11% depreciation of USD/BRL expected by 2025. Additionally, they highlight the current undervaluation of Suzano, which is appealing due to its 15%-17% free cash flow yield and a projected enterprise value to EBITDA ratio ranging between 5.4x-4.6x for 2026-2027. This is notably lower compared to its 10-year average metrics of a 10% free cash flow yield and a 6.5x EBITDA ratio.
However, the firm cautions investors about potential risks. A significant concern is the possibility of a prolonged oversupply in the market, which might press hardwood pulp prices to remain at marginal costs for an extended period. Investors are encouraged to weigh these factors carefully when considering Suzano's stock.
Wall Street Analysts Forecast
Based on the one-year price targets offered by 4 analysts, the average target price for Suzano SA (SUZ, Financial) is $12.85 with a high estimate of $15.00 and a low estimate of $11.20. The average target implies an upside of 34.30% from the current price of $9.57. More detailed estimate data can be found on the Suzano SA (SUZ) Forecast page.
Based on the consensus recommendation from 4 brokerage firms, Suzano SA's (SUZ, Financial) average brokerage recommendation is currently 1.8, indicating "Outperform" status. The rating scale ranges from 1 to 5, where 1 signifies Strong Buy, and 5 denotes Sell.
Based on GuruFocus estimates, the estimated GF Value for Suzano SA (SUZ, Financial) in one year is $12.97, suggesting a upside of 35.53% from the current price of $9.57. GF Value is GuruFocus' estimate of the fair value that the stock should be traded at. It is calculated based on the historical multiples the stock has traded at previously, as well as past business growth and the future estimates of the business' performance. More detailed data can be found on the Suzano SA (SUZ) Summary page.
SUZ Key Business Developments
Release Date: May 09, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Suzano SA (SUZ, Financial) reported sales volume growth year over year, particularly in its Brazilian and American operations.
- The company successfully implemented price increases in its main product lines, contributing to higher net prices.
- Suzano SA (SUZ) achieved a significant increase in sales volumes for its packaging operations, with a 62% rise quarter over quarter.
- The company maintained a strong focus on deleveraging, with a commitment to reducing net debt and strengthening its balance sheet.
- Suzano SA (SUZ) is on track to achieve operational break-even in its packaging operations by the second half of the year, driven by improved operational performance.
Negative Points
- The company faced higher costs in its Brazilian operations due to annual maintenance downtime, impacting overall profitability.
- International markets remain oversupplied, leading to potential challenges in maintaining pricing power.
- The ongoing trade war and macroeconomic uncertainties have created a challenging environment, affecting customer sentiment and demand forecasts.
- Suzano SA (SUZ) experienced a decline in pulp sales volumes due to inventory rebuilding efforts, which could impact short-term revenue.
- The company is operating close to the top of its leverage policy, which may limit its flexibility in capital allocation and share buybacks.
